Formal negotiations for more than $100 million in subsidies to help finance a downtown Miami convention center and 1,800-room hotel will begin in the coming days as the developer of the project pushes to have a deal in place by late October.
MDM Group wants to build about 600,000 square feet of space dedicated to convention needs, and a Marriott Marquis on the site of the old Miami Arena. In order to finance the $750 million project — one MDM says would create 1,300 jobs — the developer wants a discount on its property taxes.
On Wednesday, after months of hedging on whether MDM would seek subsidies, an attorney for the developer told Miami commissioners that they will seek tax rebates from an Overtown anti-poverty agency. The rebates, worth about $75 million in present-day value, would be paid out over more than 20 years. Due to inflation, previous projections by the developer place the total payout of tax rebates at more than $100 million.
“We'd just be eager to see if we can start formal negotiations with your staff and bring back an agreement next month,” attorney Javier Fernandez told commissioners during a public meeting.
Miami commissioners, sitting as the board of the Southeast Overtown Park West Community Redevelopment Agency, indicated without voting that they support negotiations going forward. But the financing schedule sought by MDM presents a few complications.
We'd just be eager to see if we can start formal negotiations with your staff and bring back an agreement next month.
MDM attorney Javier Fernandez
First, to spread out the subsidies over time, the city and county would need to extend the life of the redevelopment agency by 12 years, to 2042. The agency is tasked with eliminating slum and blight, and funded by property taxes that would otherwise flow to the city and county. Right now, it is scheduled to expire in 2030, and administrators on both sides are working to estimate just how much value the district will hold at that point before they talk about allowing it to exist for another 12 years.
Meanwhile, MDM also wants to increase the percentage of the property taxes generated on the old Miami Arena site that go into the redevelopment agency’s coffers. Right now, the CRA receives 50 percent of the taxes on that site. In order to finance the project in the way MDM envisions, Fernandez said the developer needs that percentage to increase, which would mean less tax revenues for the city and county.
Keon Hardemon, chairman of the Overtown CRA, said whatever agreement is negotiated will include local wage and hiring commitments, as well as small business guarantees. He said he wants to hold at least two meetings to talk about the negotiations with the community in order to avoid the loud criticisms that accompanied last year’s deal to subsidize the development off the Miami Worldcenter — an agreement that will likely be worth less than what MDM is seeking.
MDM expects to open its Marriott Marquis Miami Worldcenter Hotel & Expo Center in the fall of 2018.